Chinese television brands have quickly invaded the market with a low-cost onslaught, and they are now closely chasing Korean corporations in terms of sales share. Samsung Electronics and LG Electronics have maintained their advantage by maximizing sales through a premium strategy, but they are now struggling against the aggressive attacks from Chinese brands in a market share that was considered their last stronghold. In the first quarter of this year (January to March), the sales share gap between China's TCL and LG Electronics narrowed to 1 percentage point (P).
According to market research firm Omdia's sales data by TV brand as of the 22nd, TCL's market share in the global TV market in the first quarter of this year was 13.3%, up 1.7%P from a year ago (11.6%). In contrast, LG Electronics' share decreased from 16.7% in the same period to 15%, down 1.7%P. While LG Electronics maintained its second position after Samsung Electronics, TCL has been taking away the market share lost by LG Electronics, threatening its position at the top.
In terms of TV unit volume, LG Electronics has been trailing TCL and another Chinese brand, Hisense, since two years ago. However, this is the first time the sales share gap has narrowed to this extent. This indicates that Chinese TV companies are not just selling a lot but are also selling competitively at attractive prices.
The Chinese TV companies that are aggressively pursuing the market are not limited to TCL. Among the top five corporations by sales share in the first quarter, three are Chinese brands. Following TCL, Hisense, Skyworth, and Xiaomi are all showing impressive gains. Skyworth has entered the fifth position in terms of sales share for the first time in the first quarter, pushing Sony out.
Meanwhile, LG Electronics' performance in the TV business is not easy. In the first quarter, the operating profit margin of the MS division, which is responsible for LG Electronics' TV business, fell to 0.1%, down from 3.6% in the first quarter of last year, and sales also decreased to 4.95 trillion won from 5.06 trillion won a year ago. While LG Electronics maintained its number one position with a 52.1% market share in terms of shipment volume in the organic light-emitting diode (OLED) TV market, profitability has been sluggish. Chinese corporations are focusing on the premium liquid crystal display (LCD) TV market, viewing the profitability of the OLED TV market as low, raising concerns about the growth limits of OLED TVs.
In the industry, there is a consensus that it is only a matter of time before Chinese TV brands generate more revenue than Korean corporations. A source in the TV industry noted, "Global consumers have experienced the improved technological capabilities of Chinese TVs, and with lower prices, there is no reason not to choose them." They added, "Samsung has maintained its number one position in the TV market for 19 years, and due to its brand competitiveness through smartphones, consumers still perceive that they will "choose even if it is a bit more expensive." However, it is difficult to view LG Electronics as having high brand loyalty among global consumers, making it more susceptible to being caught up quickly.
In the premium TV market, which Samsung Electronics and LG Electronics have put significant effort into, the pressure from Chinese companies is strong. Chinese TV brands are advancing a high-end strategy by pouring out TVs larger than 80 to 100 inches, in line with the 'bigger is better' trend. In shipment volume for TVs larger than 80 inches, TCL and Hisense already outpaced Samsung Electronics and LG Electronics in the third quarter of last year. The revenue-first strategy, which was the last bastion for domestic corporations, is also being shaken.
Even in the Korean market, where brand loyalty towards Samsung and LG is strong, Chinese TV companies are increasing their market penetration. TCL, which has established a Korean corporation, is accelerating its market strategies by expanding sales channels with Coupang, LOTTE HIMART, and Costco, as well as increasing the number of installation personnel. The image of Sony, which once dominated the global home appliance market, quietly being pushed out of the TV market does not seem to be merely a concern for others.